Press Release

Wednesday, July 25, 2007

OPIC to Support Small Business Lending Program for Palestinians

$228 million loan program for Palestinians announced by President Bush

RAMALLAH, West Bank – Robert Mosbacher, Jr., President and CEO of the Overseas Private Investment Corporation (OPIC), announced today that OPIC would provide $110 million to a lending program intended to foster the growth of Palestinian small businesses and the creation of jobs, in partnership with The Aspen Institute and the Palestinian Investment Fund (PIF).

Mosbacher made the announcement in Ramallah in a ceremony attended by Palestinian Authority President Abbas and U.S. Under Secretary of State Karen Hughes.

The program, called the Middle East Investment Initiative (MEII), is a unique public/private collaboration that has been under development with the Aspen Institute for two years. The program is part of a series of initiatives in support of the Palestinians outlined by President Bush during a July 16 speech.

OPIC will provide $110 million to the program, the PIF $50 million, to guarantee 70 percent of its lending to Palestinian businesses. Private financial institutions (PFIs) that serve Palestinian customers, will lend the funds to Palestinian companies. The PFIs, which may include commercial banks, non-governmental organizations, cooperatives and microfinance institutions, will provide the remaining 30 percent of the program’s lending capacity, or $68 million, for a total of $228 million.

Aspen’s MEII has selected CHF International, a nonprofit organization with a successful history in international lending programs, to manage the initiative locally, working with financial institutions in cooperation with OPIC and PIF.

The program is designed to provide a critical flow of capital to Palestinian small and medium-sized businesses, which represent nearly 90 percent of all companies registered in the West Bank. It will target sectors of the Palestinian economy that have the greatest need for, and capacity to utilize, the funds. Once implemented, the program will help both to generate thousands of new Palestinian jobs, and promote financial sector reforms where limited access to long-term financing has been a barrier to economic development.

“Greater access to capital for Palestinian small businesses should stimulate economic growth in the West Bank, resulting in increased levels of employment and economic activity,” Mosbacher said. “In turn, economic growth should support greater regional stability, facilitating the forward momentum of the peace process.”